Holika Dahan also Kamudu pyre is celebrated by burning Holika, the devil. For a lot of traditions in Hinduism, Holi celebrates the death of Holika in order to save Prahlad by Vishnu in the city of Multan, and thus Holi gets its name. In olden days, people use to contribute a piece of wood or two for the Holika bonfire, and this represents Holika killing her brother Hiranya Kashipu.
The night before Holi, pyres are burnt in North India, Nepal and parts of South India in keeping with this tradition. The youth playfully steal all sorts of things and put them in Holika pyre.

It should also be renowned that in some parts of India the day is really called Holika[citation needed]. There is other behavior associated with the story of Prahlad, but the ablaze of Holika is the one that we can most straight associated with Holi. The fire burnt on the eve of Holi (Holika Dahan) symbolizes the burning of Holika. The story as a whole is a testament to the power of devotion (bhakta) over the sin represented by King Hiranyakashyapu, as Prahlad never lost his faith.source: https://en.wikipedia.org/